EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1016738
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Mont Adventure Equipment Pty Ltd applied for a TCO in respect of certain bivvy bags on 12 April 2010.
Instrument
TCO No 1016738 was made on 02 July 2010. It declares that those certain bivvy bags are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 1016738 is taken to have come into force on 12 April 2010.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901 was enacted to regulate the importation and exportation of goods into and out of Australia, ensuring compliance with customs laws and facilitating international trade. A significant aspect of this Act is Part XVA, which allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs. These orders provide for a lower rate of customs duty on certain goods. The Tariff Concession Instrument No. 1016738, introduced in 2010, addresses the gap by providing a concession on bivvy bags, lowering their duty rate to free from the general rate of 5%, effective from the date of the application. This legislative instrument was developed to respond to the application by Mont Adventure Equipment Pty Ltd and was enacted by the relevant legislature to ensure that no substitutable goods were produced in Australia, thereby meeting the core criteria for the concession. The policy objective is to support Australian importers by reducing the duty on specific goods, thereby enhancing trade efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 1016738 under the Customs Act 1901 applies specifically to certain bivvy bags, which are goods for which Mont Adventure Equipment Pty Ltd has applied for a Tariff Concession Order (TCO). The Act allows for a lower rate of customs duty on goods that are the subject of a TCO, provided that the goods meet the specified core criteria, including the absence of substitutable goods produced in Australia. The TCO applies to the importation of these goods into the Commonwealth of Australia and is effective from the date the application was lodged, 12 April 2010. The instrument does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person for actions taken prior to the registration of the TCO. Furthermore, the instrument extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the prescribed item of Schedule 4 under which the bivvy bags are classified, resulting in a duty rate of free instead of the general 5%.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1016738 (TCO No. 1016738) include sections 269C, 269B, 269D, 269E, and 269P of the Customs Act 1901. Section 269C requires the Chief Executive Officer (CEO) of Customs to make a Tariff Concession Order (TCO) if the application meets the core criteria. Section 269B provides definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Section 269D further defines 'goods produced in Australia', while section 269E defines 'ordinary course of business'. Section 269P mandates that the CEO make a written TCO order if satisfied that the application meets the core criteria, specifying the applicable customs duty rate under Schedule 4 of the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties or entities it governs include the obligation for the CEO to assess whether a TCO application meets the core criteria as outlined in section 269C. The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. Furthermore, the CEO must publish a notice in the Gazette, inviting submissions from interested parties who might have reasons to oppose the TCO, as stipulated in subsection 269K(1). Upon receiving no submissions, the CEO can proceed to make the TCO. The CEO must also ensure that the TCO does not adversely affect the rights of any person, except the Commonwealth, as per the provisions in subsection 269S(1).
Any breaches of the provisions outlined in the Customs Act 1901, including the failure to comply with the obligations and requirements set forth by the Act, may result in civil or criminal penalties. Under section 286 of the Customs Act 1901, a person who contravenes any provision of the Act is liable to a penalty not exceeding the greater of three times the amount of the duty or charge, or $11,000 for each offence. Additionally, subsection 286(3) provides that in the case of a continuing failure to comply with a requirement of the Act, a separate offence is committed for each day on which the failure continues.